Liu Hui Hong, The Person Appointed To Represent the Estate of Li Shiyou, Deceased and Another v. Fong Wai Meng and Others

HCPI 390/2015

[2021] HKCFI 3665

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

PERSONAL INJURIES ACTION NO 390 OF 2015

________________________

BETWEEN

________________________

Before:  Hon Marlene Ng J in Chambers

Date of the defendants’ statement of costs:  4 October 2021

Date of the plaintiffs’ list of objections:  8 October 2021

Date of the defendants’ further written submissions:  25 October 2021

Date of Handing Down Decision (paper disposal):  10 December 2021

________________________

DECISION ON SUMMARY
ASSESSMENT OF COSTS

________________________

I.  INTRODUCTION

1.On 21-22 August 2019 (“Taxation Hearing”), Master Kot taxed the plaintiffs’ (“Ps’”)  bill of costs filed on 23 July 2018 (“Bill”). On 22 August 2019, Master Kot granted an order (“Kot 1^st Order”)  that taxed/allowed $1,284,275.70 in respect of the profit cost (“PC”)  and disbursements (“DIS”)  claimed under the Bill to be paid by the defendants (“Ds”)  as paying parties, which taxed/allowed amounts included the provisionally taxed/allowed amount of $140,027.60 for costs of the taxation under the Bill (“Part C Costs”)  (“Cost Order Nisi”).

2.On 4 September 2019, Ds filed/served a summons for variation of the Kot 1^st Order (“Variation Summons”). On 26 June 2020, Master Kot granted an order in respect of the Variation Summons (“Kot 2^nd Order”)  that (a)  the Kot 1^st Order be varied to the extent that costs of the taxation be to Ds, and D’s party-and-party costs for the taxation of the Bill payable by Ps be summarily assessed in the sum of $113,742.00 (“Cost Order Absolute”), and (b)  Ps do pay 60% of Ds’ costs of the Variation Summons summarily assessed in the sum of $61,156.80.

3.On 10 July 2020, Ps filed Notice of Appeal against the Cost Order Absolute (“Notice of Appeal”)  pursuant to Order 58 rule 1 of the Rules of the High Court (“RHC”). The Appeal was heard on 13 January 2021 (“Appeal Hearing”)  by this court, and decision on the Appeal was reserved.

4.On 18 March 2021, P filed a summons for leave to inter alia discontinue the Appeal (“Discontinuation Summons”). The Discontinuation Summons also proposed certain reliefs in respect of costs of the Appeal and costs of such summons. The Discontinuation Summons was returnable before this court on 31 March 2021 (“Discontinuation Hearing”). At the Discontinuation Hearing, I granted inter alia the following order: (a)  Ps’ Notice of Appeal be dismissed, (b)  Ds were to lodge/serve written submissions on the cost reliefs in the Discontinuation Summons within 7 days, (c)  Ps were to lodge/serve written submissions on those cost matters on/before 26 April 2021, and (d)  those cost matters be determined by paper disposal unless otherwise directed (“Dismissal Order”).

5.By the time of the Discontinuation Summons, there was no dispute Ds were entitled to their costs of and occasioned by the Appeal and the Discontinuation Summons, but the parties disagreed over the following issues on costs: (a)  the basis of assessment/taxation of such costs (ie whether on party-and-party basis or indemnity basis)  (“Indemnity Costs Issue”), (b)  whether such costs should be taxed or summarily assessed (“Summary Assessment Issue”), and (c)  whether such costs should be borne by Ps (as the appellants for the Appeal and the applicants for the Discontinuation Summons)  or by Ps’ solicitors (“BCCo”)  (by a wasted costs order to be made)  (“Wasted Costs Issue”).

6.On 7 and 26 April 2021, Ds and Ps respectively lodged their written submissions on the outstanding cost issues. On 24 September 2021, this court handed down its written decision (“Decision”)  and granted inter alia the following order:

(a)	subject to (c)  below, Ps do pay Ds’ costs of and occasioned by the Appeal and the Discontinuation Summons (including all costs reserved if any)  on indemnity basis to be summarily assessed and paid forthwith (“Cost Order”);
(b)	Ds’ application for a wasted costs order against Ps’ solicitors BBCo be dismissed;
(c)	Ps and Ds do bear their own costs in respect of the argument on costs [1];
(d)	Ds do within 7 days from the Cost Order lodge and serve statement of costs in respect of costs under (a)  above not exceeding 1 page pursuant to PD14.3 (“Ds’ Costs Statement”);
(e)	Ps do within 7 days thereafter lodge with court and serve succinct summary of objections of not more than 1 page in response to Ds’ Costs Statement (“Ps’ List of Objections”);
(f)	the summary of assessment of costs will be by paper disposal (unless otherwise directed).

7.On 4 and 8 October 2021, Ds and Ps respectively lodged Ds’ Costs Statement and Ps’ List of Objections. For convenience, I shall adopt herein the abbreviations in the Decision.

8.On 15 October 2021, ICo wrote to the court with copy to BBCo to say they found Ps’ List of Objections “does not reflect the facts of the case and the Court’s Decision”, so they applied for leave “to lodge with the Court and serve on [BBCo] a reply to [Ps’ List of Objections] within 7 days from the date of the Court’s order to be made, if any”.

9.On 18 October 2021, for reasons given in this court’s written directions, this court granted leave for Ds to lodge with court and serve on Ps within 7 days from the date thereof written submissions in reply to the Ps’ List of Objections “on condition that such written submissions shall be succinct and precise, and not exceed 1 page (all footnotes included)  in not less than 13 font size with 1.5 spacing and 1 inch margin on all 4 sides on A4 paper (single side only)”.

10.On 25 October 2021, Ds lodged their 1-page written reply submissions (“Ds’ Reply Submissions”).

11.In dealing with the summary assessment of costs, I bear in mind that costs under the Cost Order were to be assessed on indemnity basis so that all costs shall be allowed except insofar as they were of an unreasonable amount or had been unreasonably incurred, and any doubt shall be resolved in favour of the receiving party (see Order 62 rule 28(4A)  of the RHC).

12.In Re Wing Fai Construction Co Ltd (Costs: Taxation), [2] Chan PJ held that an award of costs on an indemnity basis was intended to allow for payment of costs on a more generous level as compared to the case of costs awarded on a party-and-party or common fund basis. The object of such an order was to reimburse the receiving party “all (his)  costs” and to give him “a complete indemnity” and “everything”, “shorn only of” or “except the unreasonable” or “anything that was seen to be unreasonable”. Hence, the receiving party was prima facie entitled to be paid all his costs, provided that they were “costs of and incidental to the proceedings”, subject only to the qualification that any particular item which had been unreasonably incurred or any particular amount which was unreasonable must be excluded. The receiving party did not have to show that his costs had been reasonably incurred or were of a reasonable amount, only that they were not unreasonable.

13.In particular, Chan PJ said “…… if the court, for good reasons, saw fit to award him his costs on a more generous basis (ie on an indemnity basis), [Chan PJ] did not think it should be regarded as unreasonable to allow him to recover more than the normal average fees so long as they are not clearly excessive or …… absurd or extravagant” (p 670), and “…… on an indemnity taxation, it would not be considered unreasonable for the receiving party to have engaged solicitors who charged more than the average hourly rates unless they are clearly excessive. What is clearly excessive depends on the circumstances of each case” (p 672).

14.In my view, these principles are also applicable to summary assessment of costs on indemnity basis.

15.At the same time, I am mindful of the proper approach to summary assessment of costs that had been laid down by the Court of Appeal in Poon Shu Fan v Wong Tin Yan, ^[3] ie that the final figures assessed should not be disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter. I also refer to the following guidance in PD14.3:

“13. A broad-brush approach will be taken by the Court in the summary assessment procedure. The Court will not embark on a mini-taxation. Prolixity in contents of a statement of costs is therefore not acceptable. Costs for gathering information and drafting of these statements will generally not be granted.

14. Although the Court may allow the full amount claimed by the receiving party, it will, so far as possible, ensure that the final figure is not disproportionate and/or unreasonable having regard to the nature and circumstances of the application or matter and the underlying objectives stated in Order 1A. The Court will retain this responsibility notwithstanding the absence of challenge to individual items in the make-up of the figure sought. The fact that the paying party is not disputing the amount of costs can however be taken as some indication that the amount is proportionate and reasonable. The Court will therefore intervene only if satisfied the costs are so disproportionate that it is right to do so.”

16.Here, Ds sought a total sum of $715,746.00 comprising solicitors’ PC/DIS in the sum of $599,746.00 and counsel’s fees of $116,000.00. Ps sought total deductions of $576,710.00, and proposed that costs be awarded to Ds in the sum of $139,036.00.

17.By Ps’ List of Objections, Ps had no objection to (a)  the hourly rates of the fee earners of ICo, ie RL ($5,800.00)  and LK ($4,500.00), (b)  manual work in item B ($986.00)  that comprised photocopying charges in item B1 ($546.00)  and attendances by litigation clerk in item B2 ($440.00), (c)  LK’s perusal of documents at 4.8 hours ($21,600.00), and (d)  brief to counsel for the Appeal Hearing ($65,000.00).

18.On an overall basis, Ps submitted the total quantum of PC/DIS claimed in Ds’ Costs Statement was unreasonable, disproportional and grossly excessive in that (a)  ICo’s PC ($598,760.00)  were disproportionate, (b)  the involvement of 2 senior solicitors of about 33 years’ and 8 years’ post-qualification experience was not properly justified, and (c)  certain claimed costs concerned argument on costs in respect of which this court ordered each party to bear their own costs (see paragraph 6(c)  above).

19.The bulk of costs claimed in Ds’ Costs Statement was under item C (being ICo’s PC for communications including conferences, telephone calls and letters)  in the sum of $470,960.00. I find such claimed sum unreasonable and excessive even on indemnity basis, bearing in mind the nature/scope of the Cost Order that was confined to costs of and occasioned by the Appeal and the Discontinuation Summons (including all costs reserved if any)  that was exclusive of the argument on costs. Thus, under the Cost Order, Ds were not entitled to recover PC/DIS on the dispute on costs over the Indemnity Costs, Summary Assessment and Wasted Costs Issues in paragraph 5(a)-(c)  above (see footnote 1 above).

20.As explained in paragraph 5 above, by the time of the Discontinuation Hearing on 31 March 2021, Ps had conceded Ds were entitled to costs of and occasioned by the Appeal and the Discontinuation Summons. Even though Ds eventually succeeded in persuading this court to award those costs on indemnity basis, Ds failed to obtain any cost order in respect of the argument on costs on the Indemnity Costs Issue. All PC/DIS incurred after the Discontinuation Hearing and the Dismissal Order on 31 March 2021 were in relation to the argument on costs for which Ds failed to obtain any cost order in their favour.

21.Turning to the period up to the Discontinuation Hearing and the Dismissal Order on 31 March 2021, I make the following broad observations in relation to the Appeal and the Discontinuation Summons:

(a)	The Appeal was based on existing evidence pursuant to Order 58 of the RHC. No further affidavit was filed for the Appeal, and the only material documents added to the hearing bundle for the Appeal were the transcripts of the Taxation and Variation Hearings before Master Kot. Costs in respect of the pre-existing documents had been dealt with by the Kot 1st and 2nd Orders, which the Decision left undisturbed.
(b)	The Appeal was handled by counsel who canvassed the relevant background, law and costs in his Appeal Submissions, and his brief fee included his fees for preparing and drafting his Appeal Submissions.
(c)	The Discontinuation Summons by itself made clear the Appeal would no longer be pursued, and Ps conceded in principle to pay costs of and occasioned by the Appeal and the Discontinuation Summons. These concessionary matters would not have required significant solicitors’ time costs for taking instructions from the client or for briefing counsel. The only outstanding matters would be the manner of final disposal of the Appeal (which took little time and effort as this court at the Discontinuation Hearing decided to dismiss rather than to grant leave for Ps to discontinue the Appeal), and by the Cost Order I have ordered each party to bear their own costs as to the outstanding cost matters, ie the argument over the Indemnity Costs, Summary Assessment and Wasted Costs Issues.
(d)	Ds only obtained costs of and occasioned by the Appeal and costs of the Discontinuation Summons (i)  prior to the Discontinuation Hearing / Dismissal Order and (ii)  at the Discontinuation Hearing (but not in relation to the disputed Indemnity Costs, Summary Assessment and Wasted Costs Issues), but not after the Dismissal Order as costs incurred after the Dismissal Order concerned the Indemnity Costs, Summary Assessment and Wasted Costs Issues.
(e)	The crux of Ds’ costs recoverable under the Cost Order concerned costs of and occasioned (i)  by the Appeal in respect of which no fresh evidence was adduced and Ds had engaged counsel to attend the Appeal Hearing and to draft his Appeal Submissions for such purpose, and (ii)  by the Discontinuation Summons limited to the manner of final disposal of the Appeal.
(f)	The subject matter of Ps’ Appeal was to set aside the Kot 2nd Order, and in monetary terms, the amount of costs involved would not have exceeded $100,000.00. According to Ps’ Appeal, practically speaking (although this court by the Decision found the Notice of Appeal did not strictly make clear)  Ps claimed they should have recovered costs of the taxation up to 27 June 2019 in the sum of $113,877.60 [4] and should have paid Ds’ costs of the taxation from 28 June 2019 onwards in the sum of $28,800.00, [5] which upon set-off would come down to $85,077.60. But Ds’ Costs Statement claimed Ds incurred $715,746.00 to resist such Appeal and to deal with the Discontinuation Summons (exclusive of the argument on costs – see footnote 1 above).

22.With the above broad observations in mind, I turn to items C1-6 of Ds’ Costs Statement that concerned “communications including conferences, telephone calls and letters”.

23.Under item C1, Ps claimed attendance on client by RL for 12.9 hours ($74,820.00)  and by LK for 15.5 hours ($69,750.00)  totalling $144,570.00. Ps suggested 1.5 hours and 1.5 hours be allowed RL and LK respectively in the total sum of $15,450.00. Ds’ Reply Submissions stated Ps’ Appeal was wholly unmeritorious and Ds had no alternative but to oppose it and incur costs. In my view, Ds’ such submissions were neither here nor there for the purpose of summary assessment costs. After all, this court did grant the Cost Order in Ds’ favour, but the issue at hand was assessment of the quantum of Ds’ costs under the Cost Order.

24.I accept that (a)  costs would have to be incurred for ICo to report to the client on the Appeal and the Discontinuation Summons, to advise them of appropriate litigation strategy, to report to them on the outcome, and to advise them and to take instructions from them on BBCo’s settlement offers, and (b)  Ds were to recover such costs (but not costs in respect of the above matters that concerned the disputed Indemnity Costs, Summary Assessment and Wasted Costs Issues - see footnote 1 above)  on indemnity basis. But given (i)  the Appeal was a master’s appeal from the Kot 2^nd Order with no fresh evidence adduced and Ds having engaged counsel to strategise the opposition to the Appeal and to attend the Appeal Hearing, and (ii)  the Discontinuation Summons plainly conceded putting an end to the Appeal and Ds also having engaged counsel to strategise in relation to such summons [6] and to attend the Discontinuation Hearing, I am unable to see any need for significant effort to take primary instructions from Ds. Indeed, the heart of the Appeal concerned Ps’ costs of taxation and the propriety or otherwise of the Kot 2^nd Order in relation thereto, which matters would be more in the knowledge and skill of ICo being solicitors involved in the litigation and taxation process than in the knowledge of the lay clients.

25.Ds’ Reply Submissions contended it was wholly unclear whether Ps were legally aided in the Appeal, and if not, whether Ps could pay Ds’ costs of the Appeal. It was said Ds were puzzled and required detailed advice from RL and LK and counsel. In my view, whilst the Notice of Appeal still carried the legal aid reference in its header, the legal position was straightforward and clear. Upon the DLA filing Notice of Discharge of the Widow’s legal aid certificate on 14 July 2020, and in the absence of any fresh legal aid certificate, Ps were not aided persons for the Appeal (see paragraph 38 and footnotes 16-17 of the Decision). It was true that Ms Chark and/or BBCo made strange allusions about Ps’ legal aid status (see paragraph 39 of the Decision), but a simple search of the court file would have confirmed there was no fresh legal aid certificate (which had to be filed by the DLA pursuant to section 13 of the LAO), and that inevitably meant Ps were no longer legally aided. But irrespective whether Ps were legally aided or not, Ds had to deal with the Appeal that was to be heard at the Appeal Hearing, and it would not have altered Ds’ substantive opposition to the Appeal. If it were suggested, as Ds’ Reply Submissions seemed to say, that Ds was concerned whether Ps (without legal aid)  would be able to pay their costs of the Appeal, then there was all the more reason to focus Ds’ opposition to the Appeal and not to incur unreasonable costs.

26.In the circumstances, even bearing in mind the generous basis of indemnity costs, I allow 4 hours for RL ($23,200.00)  and 5 hours ($22,500.00)  for LK, totalling $45,700.00.

27.As regards item C2, Ds claimed attendance on BBCo by RL for 6.1 hours ($35,380.00)  and by LK for 9.2 hours ($41,400.00)  totalling $76,780.00. Ps claimed that on 18 November 2020 BBCo notified ICo that the bundles for the Variation Summons would be re-used, and BBCo agreed with Ds’ proposals for including further documents in the hearing bundle for the Appeal, so it was unreasonable to have 2 solicitor fee-earners negotiate the contents of the hearing bundle, and proposed to allow 2 hours for LK in the sum of $9,000.00. Ds’ Reply Submissions suggested Ps’ view of the matter was too narrow as BBCo sent more correspondence to ICo than disclosed in the hearing bundle for the Appeal. Ds claimed some of BBCo’s correspondence attempted to put forward settlement offers, but the breakdown therein was confusing and required a lot of time for considering them.

28.I accept BBCo made various offers for the disposal of the Appeal (and consequently, the Variation Summons)  (see paragraph 10 of Ms Chark’s Costs Submissions), which ICo had to deal with and to take Ds’ instructions on those offers. BBCo’s offers (as referred to in paragraph 10 of Ms Chark’s Costs Submissions)  fluctuated from Ps paying Ds $114,376.00 to Ps paying Ds $34,376.00. Given the quantum range of such offers, the depth of effort required to understand them (and to deal with other conventional correspondence for putting together the hearing bundle for the Appeal)  would not have required combined 15.3 hours of time costs by RL and LK even on the generous basis of indemnity costs. In my view, the time spent was unreasonable. Taking into account all the circumstances, I allow 3 hours for RL ($17,4000.00)  and 4 hours ($18,000.00)  for LK, totalling $35,400.00.

29.As regards item C3, Ds claimed attendance on counsel by RL for 14.6 hours ($84,680.00)  and by LK for 24.9 hours ($112,050.00)  totalling $196,730.00. Ps claimed it was unreasonable for ICo to have incurred such sum, and suggested allowing 3 hours for LK totalling $13,500. Ds’ Reply Submissions reiterated Ds’ contentions in paragraphs 23 and 25 above, which contentions I have dealt with in paragraphs 23-25 above. Given the clear legal picture, I see little need for RL and LK to confer with counsel at length on the issue of whether Ps were still legally aided. If counsel were approached on such issue, counsel would (or should)  have advised on the clear legal picture as explained above.

30.As explained above, there were no further evidence adduced for the Appeal. Counsel should have gathered the nature and ambit of and the issues for the Appeal from the documents in the hearing bundle for the Appeal and Ms Chark’s Appeal Submissions. Indeed, counsel had the benefit of full transcripts of the Taxation and Variation Hearings, which obviously speak for themselves and which would aid counsel’s understanding as to what happened before Master Kot and her reasons for decision for the Kot 2^nd Order. In any event, LK appeared on behalf of Ds at the Variation Hearing, so even if counsel had any queries, she would have been able to easily point counsel to the relevant evidence or relevant part of the transcript. Even on the more generous indemnity basis, I am unable to see need for protracted communications with counsel by RL and LK. As for the Discontinuation Summons, the allowed costs were limited and covered essentially matters which Ps had in principle conceded (see paragraphs 4-5 and 21(c)-(e)  above). It would not have taken long to liaise with counsel on those matters. Taking into account all the circumstances, I allow 3 hours for RL ($17,4000.00)  and 4 hours ($18,000.00)  for LK, totalling $35,400.00.

31.As regards item C4, Ds claimed attendance on court by RL for 2.6 hours ($15,080.00)  and by LK for 4.7 hours ($21,150.00)  totalling $36,230.00. Ps pointed out that on 18 and 23 November 2020, BBCo wrote to request ICo to provide copies of transcripts of the proceedings below, and suggested that had ICo responded to BBCo, it would not have been necessary for BBCo/ICo to write to the court on 1 December 2020 followed by unreasonably lengthy letters to the court. Ps suggested disallowing the entire sum of $36,230.00.

32.On the matter of transcripts of the proceedings before Master Kot, the court notes there were 2 short letters by ICo to the court on 1 and 3 December 2020 informing the court that they wished for full transcripts of the Variation Hearing, and later that they had reached agreement with BBCo on the provision of transcripts.

33.Ds’ Reply Submissions pointed out there were also “the Court’s directions (re Discontinuation Summons and status of the Decision)”. The court notes that ICo wrote to the court on 11 January 2021 on the hearing bundle for the Appeal, and the court granted brief written directions in relation to the Discontinuation Summons on 22 and 26 March 2021. ICo wrote to the court on 26 March 2021 thrice in relation to the Discontinuation Summons (but the 2^nd letter was simply about re-faxing the 1^st letter to court and the 3^rd letter was simply a short enquiry about estimated length of the hearing of such summons). ICo’s 1^st letter of 26 March 2021 set out Ds’ stance in relation to the Discontinuation Summons and costs of the Appeal, but also raised the issue of legal aid. Costs incurred by Ds for such letter, insofar as it contended (and set out the grounds for)  Ds’ costs of the Appeal to be paid by Ps on indemnity basis, did not come under the Cost Order. On 27 August 2021, this court gave brief written directions in relation to handing down of the Decision.

34.It is clear from the above that apart from ICo’s 1^st letter dated 26 March 2021, the other correspondence between ICo and the court were brief and concerned procedural/mechanical matters. As for ICo’s 1^st letter dated 26 March 2021, item E1 of Ds’ Costs Statements referred to “Letter to the Court dated 26 March 2021 and submission on Indemnity Costs” as “Drafting” work by counsel for which he claimed a fee of $16,000.00. Indeed, the contents of such letter were partially similar to counsel’s Costs Submissions. That being the case, I am unable to see any need for RL and/or LK to incur any substantial time in relation to such letter.

35.Taking all of those matters into account and bearing in mind costs are to be assessed on indemnity basis, I allow 0.75 hour for RL ($4,350.00)  and 1.5 hours ($6,750.00)  for LK, totalling $11,100.00, for item C4.

36.As regards item C5, Ds claimed attendance on the LAD by LK for 1.8 hours in the sum of $8,100.00. Ps claimed it was unnecessary and unreasonable for ICo to attend on the LAD and suggested disallowing this item. Ds’ Reply Submissions submitted it was necessary and not unreasonable for Ds to make enquiries with the LAD on whether the Appeal was covered by legal aid. In my view, although the legal picture was clear such that detailed advice was not required (see paragraph 25 above), and the point could have been addressed shortly by counsel, it was not unreasonable for ICo to make brief enquiries with the LAD for it was BBCo’s allusions to legal aid cover that muddied the waters. However, even on a generous indemnity basis, 1.8 hours by LK would be unreasonable, and I allow 0.5 hours by LK ($2,250.00)  under this item.

37.As regards item C6, Ds claimed attendance on the LCD by LK for 1.9 hours in the sum of $8,550.00. Ps claimed it was unnecessary and unreasonable for ICo to attend on the LCD and suggested disallowing this item. Ds’ Reply Submissions suggested that attendance on the LCD was necessary to deal with Ms Chark’s Appeal Submissions concerning the taxation proceedings which the LCD took part in.

38.It was true Ms Chark and the LCD attended the Taxation Hearing, and representatives of ICo did not appear for Ds at such hearing. But Ds had the benefit of the transcripts of the Taxation Hearing, and no fresh evidence from any quarter (including the LCD)  was put forward for the Appeal. What transpired at the Taxation Hearing would be revealed in the transcripts. However, I accept that on the more generous indemnity basis, it was not unreasonable for ICo to approach the LCD for quick pointers to relevant parts of the transcripts in order to address Ms Chark’s Appeal Submissions. But that said, I find it unreasonable for LK to spend 1.9 hours with the LCD. I would allow 0.5 hours by LK ($2,250.00)  for this item.

39.As regards item D1, Ds claimed costs for drafting documents by RL for 4 hours in the sum of $23,200.00. Ps claimed it was unnecessary and unreasonable for ICo to incur such time costs and suggested disallowing this item. In my view, it was unclear what documents were drafted by ICo since both the Notice of Appeal and the Discontinuation Summons were drafted by BBCo, and no fresh affirmation/evidence were adduced. Further, correspondence with the court, the client and other relevant parties have been claimed under items C1-6, and I have allowed time costs for instructions to counsel under item C3.

40.Ds’ Reply Submissions suggested RL had to consider and discuss with counsel on “Submissions settled by Counsel and write letter to the Court”. I cannot see how such work would fall within item D1 being drafting work by solicitor fee-earners. First, according to item E2(1)  of Ds’ Costs Statement, it was counsel who did “drafting” work of his Appeal Submissions, which work was covered by his brief fee of $65,000.00. Such coverage by counsel’s brief fee is consistent with general principles in relation to taxation/assessment of such disbursements. In Bond Speed Limited v Goodwell Sam Cheong Grocery Co Ltd, this court then as taxing master explained those general principles as follows: [7]

“42. A brief fee covers perusing the brief, reading the documents, researching the law, preparing the case, attending upon the case at court when listed, and committing reasonable time and effort that delivery and acceptance of the brief involves. Counsel is not normally entitled to be remunerated separately for necessary work which is an incident of the proper representation of the client since it is all part of the work which he accepts as an obligation to perform by accepting the brief (see Hong Kong Civil Procedure 2012 Vol.1 para.62/App/31 at pp.1172-1173),[8] eg preparing written submissions or skeleton arguments (see Hong Kong Civil Procedure 2012 Vol.1 para.62/App/33 at pp.1173).[9] Insofar as counsel has prepared whilst drafting the written submissions or skeleton arguments, that preparation time should not be duplicated in the brief fee.” (my emphasis)

41.In such circumstances, I am unable to see how ICo’s consideration and discussion with counsel on counsel’s own Appeal Submissions would amount to ICo’s own “drafting” work. Costs for ICo’s perusal and consideration of counsel’s Appeal Submissions would be considered under item D2. As for discussion with counsel on his Appeal Submissions, at best (if at all)  this would have been part of the costs of attendance on counsel under item C3, and I have assessed such item above by taking into account ICo’s communications with counsel on his Appeal Submissions. That said, such communications should not be significant since it was really for counsel (not ICo)  to draft and prepare his own Appeal Submissions for which work he charged under his brief fee.

42.Ds’ Reply Submissions further referred to “write letter to the Court” as part of item D1. That is not understood for attendance on court was covered under item C4 which I have assessed above. In all the circumstances, I disallow item.

43.As regards item D2, Ds claimed costs for perusal of documents by RL for 5.3 hours ($30,740.00)  and by LK for 4.8 hours ($21,600.00)  totalling $52,340.00. Ps claimed it was unreasonable to have 2 solicitor fee-earners peruse documents when counsel had been retained for the Appeal and Discontinuation Hearings, and suggested taxing off RL’s costs ($30,740.00). Ds’ Reply Submissions contended that RL and LK had to consider Ms Chark’s lengthy Appeal Submissions and to advise client accordingly.

44.I bear in mind this item of costs is assessed on indemnity basis, and on such generous basis I see no sufficient basis to object to the involvement of two fee-earners in dealing with the matter. The core documents for perusal would be the Notice of Appeal, the Discontinuation Summons, counsel’s Appeal Submissions, Ms Chark’s Appeal Submissions and list of authorities (but exclusive of documents that concerned disputed cost issues). I accept Ps had chosen to prepare and serve Appeal Submissions of some length and also authorities in abundance, but with the involvement of counsel, even assessment on indemnity basis would not have allowed recovery of costs for perusal of all authorities at the level of detail required of an advocate for the Appeal and Discontinuation Hearings. I also could not ignore the fact that RL and LK were familiar with the background of the matter having personally handled the Variation Summons/Hearing. In the circumstances, I find the time costs sought unreasonable by Ds, and allow 4 hours each for RL ($23,200.00)  and LK ($18,000.00)  in the total sum of $41,200.00.

45.As regards item D3(a), Ds claimed costs for preparation for the Appeal Hearing by RL for 2.2 hours ($12,760.00)  and by LK for 3.5 hours ($15,750.00)  totalling $28,510.00. Ps claimed it was unreasonable and unnecessary to have 2 solicitor fee-earners prepare for the Appeal Hearing when counsel was engaged, and suggested allowing 1 hour for LK in the sum of $4,500.00.

46.I note that item D4(a)  showed RL attended the Appeal Hearing. There was no claim for LK to also attend the Appeal Hearing, so LK would not have needed to prepare for the Appeal Hearing. In any event, I note (a)  the Appeal Hearing was scheduled for a 3-hour hearing (and it eventually took 2 hours), (b)  counsel was briefed to appear at the Appeal Hearing and to prepare/draft the Appeal Submissions for such purpose, (c)  RL was well familiar with the issues as she was the partner-in-charge dealing with the Variation Summons (and the Appeal purported to be a re-hearing of the Variation Summons under Order 58 of the RHC), and (d)  I have allowed time costs for Ds’ solicitor fee-earners to peruse/consider Ms Chark’s Appeal Submissions and for them to attend counsel on his Appeal Submissions. Since both Ms Chark’s and counsel’s Appeal Submissions were dated 8 January 2021 (ie 5 days before the Appeal Hearing), matters would have been fresh in the mind of RL. Viewed in such context, I find 5.7 hours of solicitor fee-earners’ time costs for preparation for the Appeal Hearing excessive and disproportional. On indemnity basis, I allow 1.5 hours for RL ($8,700.00)  for item D3(a).

47.As regards item D3(b), Ds claimed costs for preparation for the Discontinuation Hearing by LK for 1.9 hours ($8,550.00). Ps claimed the Discontinuation Hearing was for argument on costs in respect of which Ds did not secure any cost order in their favour, so Ps suggested to disallow this item. Ds’ Reply Submissions suggested that the Discontinuation Hearing on 31 March 2021 resulted from the Discontinuation Summons.

48.Of course, the Discontinuation Hearing resulted from the Discontinuation Summons. Likewise, the disagreements on costs in relation to the Indemnity Costs, Summary Assessment and Wasted Costs Issues resulted from the Discontinuation Summons, but I ordered each party to bear their own costs in respect of such disagreements on costs. As explained in paragraphs 4-5 and 21(c)-(e)  above, Ps by the Discontinuation Summons and at the Discontinuation Hearing conceded the Appeal should be brought to an end, and Ps would pay Ds’ costs of the Appeal and the Discontinuation Summons. There was a slight difference between the parties as to how the Appeal should be formally disposed of. Ps proposed that the Notice of Appeal be discontinued, but Ds wanted to have it dismissed. There was little argument on this at the Discontinuation Hearing, and I ordered dismissal of the Appeal. The Discontinuation Hearing was largely about the parties’ dispute on certain costs issues, ie the Indemnity Costs and Wasted Costs Issues raised by Ds, and the Summary Assessment Issue raised by Ps, and about the relevant case management on how to resolve such dispute on costs. This eventually led to the Dismissal Order that required the parties to lodge their respective Costs Submissions. But I bear in mind that by the Decision, each party was ordered had to pay their own costs in respect of the argument on costs.

49.Bearing in mind (a)  counsel was briefed to attend the Discontinuation Hearing, (b)  counsel was well familiar with the issues (since the same counsel also appeared on behalf of Ds for the Appeal Hearing and drafted ICo’s 1^st letter dated 26 March 2021 to the court), and (c)  the hearing time for the Discontinuation Hearing was scheduled for 3 minutes, I find it unreasonable and disproportionate for LK to have spent 1.9 hours to prepare for the Discontinuation Hearing (exclusive of the argument on costs). Even on the generous approach under indemnity basis of costs, I allow 0.5 hours of LK’s time at $2,250.00 under this item.

50.As regards item D4(a), Ds claimed costs for attending the Appeal Hearing by RL for 2 hours ($11,600.00). Ps suggested to allow time costs for 2 hours by LK in the sum of $9,000. In my view, Ds’ claim for this item in the sum of $11,600.00 should be allowed in its entirety. I bear in mind that Ds’ costs are assessed on indemnity (and hence more generous)  basis, and it is not unreasonable for the handling partner-in-charge to attend the Appeal Hearing.

51.As regards item D4(b), Ds claimed costs for attending the Discontinuation Hearing by LK for 0.8 hours ($3,600.00). Ps claimed the Discontinuation Hearing was for argument on costs in respect of which Ds did not secure any cost order in their favour, so Ps suggested to disallow this item. I do not agree that the Discontinuation Hearing entirely concerned the argument on costs. At such hearing, the court had to grant the Dismissal Order to bring closure to the Appeal by dismissing the same. Nevertheless, there was essentially no dispute that the Appeal would come to end, and a substantial part of the Discontinuation Hearing concerned eliciting the Indemnity Costs, Summary Assessment and Wasted Costs Issues over which the parties disputed (and in respect of which I eventually ordered each party to bear their own costs). In the circumstances, it would only be appropriate to allow 0.3 hours of LK’s time in the sum of $1,350.00.

52.As regards item E1, Ds claimed counsel’s fee of $16,000 for drafting letter to court dated 26 March 2021 with submissions on indemnity costs. Ps submitted this item should be disallowed as Ds did not secure any cost order in their favour for argument on costs. Ds’ Reply Submissions suggested such letter was “not on the argument of costs”. I refer to the discussion in paragraphs 33-34 above in relation to ICo’s 1^st letter dated 26 March 2021. Bearing in mind part of such letter contended for Ds’ costs of the Appeal to be paid on indemnity basis (which formed subject of argument on costs under the Indemnity Costs Issue, and in respect of which I ordered each party to bear their own costs), I allow $8,000.00 under item E1.

53.As regards item E2(1), Ds claimed counsel’s brief fee for attending the Appeal Hearing (including drafting his Appeal Submissions)  in the sum of $65,000.00. Ps had no objection to this item.

54.As regards item E2(2), Ds claimed counsel’s brief fee for attending the Discontinuation Hearing (including perusal of papers and preparation before the hearing)  in the sum of $35,000.00. Ps claimed that the Discontinuation Hearing was for argument on costs, so Ds had to bear their own costs. Again, I disagree that the Discontinuation Hearing was entirely about argument on costs. But for reasons explained in paragraph 51 above, there was little dispute about bringing the Appeal to an end (which was the essential purpose of the Discontinuation Summons), and the heart of the disagreement between the parties was about the Indemnity Costs, Summary Assessment and Wasted Costs Issues elicited at the Discontinuation Hearing, but in respect of which each party was to bear their own costs. In the circumstances, I apportion half of counsel’s brief fee for the Discontinuation Hearing for the dispute over costs, so I allow half of counsel’s brief fee for item E2(2)  in the sum of $17,500.00.

55.Taking into account all of the above matters, having considered the nature and scope of the Appeal and the Discontinuation Summons (but excluding the argument on costs), the materials in relation thereto, the submissions and list of authorities, what transpired at the Appeal and Discontinuation Hearings (but excluding the argument on costs), the involvement of counsel, and considering all the circumstances, I am satisfied that the claim for costs in Ds’ Costs Statement (save for the items that Ps had no objection or that I have accepted or adjusted down)  were unreasonable and disproportionate, albeit not to the extent suggested by Ps.

56.Regretfully, this is a case in which both Ps (see the Decision)  and Ds (see this decision)  have incurred excessive legal costs and disbursements in a fatal injury tort litigation that did not appear to be overly complex and/or difficult. It is even more unfortunate that Ps and Ds respectively seek to recover disproportional costs from the other party, thereby incurring even further costs in the course of doing so. Neither party came away from all this with anything of real benefit: Ds had incurred significantly more unrecoverable costs than they recovered, and Ps came away with an unsuccessful Appeal and had to bear their own costs for the whole exercise. The court does not smile kindly on such approach to civil litigation so many years after the implementation of the CJR.

57.Ds’ total costs and disbursements on Ds’ Costs Statement are assessed at $288,686.00 (being $546.00 (B1)  + $440.00 (B2)  + $45,700.00 (C1)  + $35,400.00 (C2)  + $35,400.00 (C3)  + $11,100.00 (C4)  + $2,250.00 (C5)  + $2,250.00 (C6)  + $41,200.00 (D2)  + $8,700.00 (D3(a))  + $2,250.00 (D3(b))  + $11,600.00 (D4(a))  + $1,350.00 (D4(b))  + $8,000.00 (E1)  + $65,000.00 (E2(1))  + $17,500.00 (E2(2)).

Brenda Chark & Co, for the plaintiffs

Ince & Co, for the defendants